The research and development (R&D) investment by Korea's top five pharmaceutical companies appears stuck around the 1 trillion won level. With the industry unsettled by drug price cuts, the calculus varies widely by corporations. Some are taking the straight path by focusing on new drug development, while others are diversifying to find new revenue sources.
According to business reports from the five largest domestic drugmakers by sales on the 5th, last year's research and development investment totaled 1.0468 trillion won. That is up 0.4% from the previous year's 1.0431 trillion won in R&D expenses, effectively little change.
Yuhan was the most aggressive in research and development investment last year. True to a drugmaker with sales exceeding 2 trillion won, it spent 242.4 billion won on R&D. It was followed by Hanmi Pharmaceutical (229 billion won), Daewoong Pharmaceutical (217.7 billion won), Chong Kun Dang pharmaceutical (185.8 billion won), and GC Biopharma (171.9 billion won).
The year-over-year change rates diverged somewhat. Chong Kun Dang pharmaceutical and Hanmi Pharmaceutical increased their R&D expenses by 18% and 9%, respectively, from a year earlier. These corporations said R&D costs rose as they accelerated preclinical and clinical work on new drug candidates.
By contrast, Yuhan, Daewoong Pharmaceutical, and GC Biopharma reduced spending by 10%, 6%, and 2%, respectively. A Yuhan official said there was "selection and concentration," while GC Biopharma said "there were some amount changes as we adjusted the weighting in pipeline (new drug candidate) operations."
However, the share of research and development expenses in total sales differed slightly. The order was Daewoong Pharmaceutical (15.81%), Hanmi Pharmaceutical (14.8%), Yuhan (11.1%), Chong Kun Dang pharmaceutical (10.98%), and GC Biopharma (8.6%).
The corporations' research and development strategies for this year also vary. Yuhan, Hanmi Pharmaceutical, and Chong Kun Dang pharmaceutical plan to focus on new drug development. A Yuhan official said, "We will concentrate on anticancer, metabolic disease, and immune disease therapies." The company is also considering establishing an overseas entity dedicated to new drug development.
Hanmi Pharmaceutical is speeding up its anti-obesity drug program. In the second half of this year, it plans to unveil Efpeglenatide, an obesity drug tailored for Koreans. It is a glucagon-like peptide (GLP)-1 class therapy administered as a once-weekly injection. The product was developed for Koreans, who generally have a lower body mass index (BMI) than Westerners. A candidate that helps reduce weight while preserving muscle mass is aiming for commercialization in 2031.
Chong Kun Dang pharmaceutical is also focusing at its subsidiary Accela, which is dedicated to new drug development, on candidates for dyslipidemia (hyperlipidemia), intractable neurological diseases, and oral obesity and diabetes treatments. Chong Kun Dang pharmaceutical is developing an ADC (antibody-drug conjugate) as well. ADCs attach a drug to an antibody to precisely target only cancer cells, earning the nickname "guided missile that targets cancer cells."
Kyongbo Pharmaceutical, a Chong Kun Dang Holdings subsidiary, increased investment in its ADC plant under construction in Asan, South Chungcheong, from 86.5 billion won to 96 billion won. A Chong Kun Dang pharmaceutical official said, "In addition to developing ADC new drugs, we plan to carry out contract development and manufacturing (CDMO) at the Asan plant."
Daewoong Pharmaceutical is seeking new revenue sources in Digital Healthcare in response to drug price cuts. This year's Digital Healthcare sales target is 300 billion won. The goal is to enable patients, even after discharge from the hospital, to manage their health around the clock at home by monitoring heart rate, respiration, and more with wearable devices.
An industry official said, "Investment in research and development can also serve as an indicator of a drugmaker's confidence in succeeding in new drug development," adding, "Even amid the threat of generic drug price cuts, focusing on new drug development could become an opportunity to strengthen competitiveness; conversely, failing to respond in a timely manner could cause damage."
The industry is watching to see whether domestic drugmakers can stay focused on research and development without being swept up by the wave of drug price cuts and demonstrate their strength overseas.